HFTP Blog
April 30, 2018

Paycheck Checkup: The IRS Encourages Taxpayers to Review Withholdings

Blog Education Finance
Written by HFTP Publications

April 17, 2018: Tax day in the United States has come and gone. Individual taxpayers have filed all of their paperwork, and have either paid up the amount owed to the United States Internal Revenue Service (IRS) or deposited their refunds in their bank accounts. Now that the 2018 tax year is in the rear view mirror for the majority, at least those that did not file an extension, we must look forward to the next tax day in 2019 — April 15....The Tax Cuts and Jobs Act was passed in December of 2018, which created a need to review the amount of tax withheld from taxpayers’ paychecks in the United States. The changes in the new tax law may result in individuals paying too little or too much withholding in future years....For this reason, the IRS has created multiple resources to help individuals review their withholding....According to the IRS, the individuals in the categories listed below are the individuals most likely in need of a change in their W-4 withholding. If you fall into one of these categories, use the IRS Withholding Calculator:

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  • Two-income families

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  • People with two or more jobs at the same time or who only work for part of the year

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  • People who claim credits such as the Child Tax Credit

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  • People who claim older dependents, including children age 17 or over.

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  • People who itemized deductions in 2017

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  • People with high incomes and more complex tax returns

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  • People with large tax refunds or large tax bills for 2017

The calculator will ask for information from your most recent pay stub such as the federal income tax withholding so far in 2018, and your 2017 tax return. The one thing it will not ask for is personally-identifiable information (PII). Due to multiple large cybersecurity breaches in 2017, there was a heightened fear of tax fraud as we approached the 2018 tax deadline. In the current climate where data security breaches are a common occurrence, individuals must be hyper-vigilant. (Watch out for tax scams via phone calls or emails!) In addition, the IRS does not save or record the information entered into the Withholding Calculator, and will not contact you regarding the information entered....If you would like further information, please visit one of the following links provided by the United States Internal Revenue Service (IRS)....Helpful Links IRS YouTube Videos Tany
a Venegas, MBA, MHM, CHIA is the executive director at the HFTP Americas Research Center at the Conrad N. Hilton College of Hotel and Restaurant Management at the University of Houston. Contact Tanya via email at [email protected] or via phone at +1 (713) 743-1839.
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